Laws Are for Little Countries

To the uninitiated, nothing may be more boring than economics, and especially international trade talks. I know that because 15 years ago I was one of the uninitiated.

I was pretty typical of the type – fairly well-educated, pretty good job, regular follower of the news via “respectable” sources such as the BBC and The Times. I remember fifteen years ago noticing my news sources telling me about some violent protests that were happening thousands of miles away in Seattle, Washington. Ordinarily I tended to sympathise with protestors, feeling sure they were probably right, but what intrigued me about these protests was the fact that they were protesting about trade talks. Who in their right mind cares about trade talks, I wondered – especially if you care enough to close down a city and get beaten up and gassed by cops in the process.

Fortunately my mistrust of governments was in its formative stages, and I knew enough to realise that possibly these protesters were also probably right; but right about what? Possibly they knew something I didn’t. I wondered what it might be.

I didn’t start to teach myself economics until a few years later, once I started writing full-time. Provoked by the Bush-Blair alliance taking the UK into an illegal bloodbath in Iraq, my cynicism about governments was maturing nicely. Although I learnt a lot of the standard text book lessons of economics, I deliberately sought out the non-standard lessons – especially on economic history (which is actually a fascinating subject).

Of course the Seattle protesters were 100% right. The government trade delegations meeting there were up to no good. For the last several decades, at least, it’s probably true to suggest that most if not all trade delegations representing first world governments were up to no good. Inspired by the famous Battle in Seattle, protests at international trade summits are now quite normal – and rightly so.

There are of course degrees of evil. Some of these trade meetings are more sinister than others. Over the last year or so awareness has been building about the extremely sinister Trans Pacific Partnership, and now awareness is slowly spreading about the equally outrageous Transatlantic Trade and Investment Partnership (TTIP), a deal that would give absolute control of transatlantic trade to Washington, where all the stooges of big business are based.

Given that pressure is now building on both sides of the Atlantic to conclude TTIP within a year or so (so it doesn’t interfere with the US presidential elections… obviously) it’s now pretty important that people learn what TTIP is all about.

According to a Commons Briefing Paper (CBP) published on 19th February 2014 the Transatlantic Trade and Investment Partnership (TTIP) started life in November 2011 during a US-EU summit meeting. The paper says the meeting agreed that a “High Level Working Group on Jobs and Growth” should be established to…

identify policies and measures to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness.

So TTIP was conceived, supposedly, to stimulate economic growth and create jobs. However, just over a year later the “High Level Working Group on Jobs and Growth” published its final report where it concluded that…

a comprehensive agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and which contributes to the development of global rules, would provide the most significant mutual benefit.

Shortly after the publication of that report the birth of TTIP was announced. According to the CBP its purpose was supposed to…

increase trade and investment between the US and EU by reducing tariffs (particularly on agricultural products), aligning regulations and standards, improving protection for overseas investors, and increasing access to services and government procurement markets by foreign providers.

In other words the originally stated intention of supporting economic growth and jobs has quietly disappeared altogether from the given purpose of TTIP, and is now replaced with “aligning regulations and standards, improving protection for overseas investors, and increasing access to services and government procurement markets by foreign providers.” No doubt the sellers of TTIP would claim that these measures are just the very thing needed to support economic growth and job creation. So presumably the rest of the Commons Briefing paper will tell us exactly how that will happen.

Meet the leader

We learn that the trade talks are to be led by EU Trade Commissioner Karel De Gucht, a Belgian lawyer who, incidentally and according to recent press reports, was recently tried (and acquitted) for tax fraud to the tune of about a million euros. So he seems to be exactly the right fellow to be overseeing fair play.

“Potential Sticking Points”

Section 3 of the CBP refers to “potential sticking points” in the talks around “sensitive sectors”, identifying particularly the French film industry. It goes on to say that on 14 June last year the European parliament agreed that “audiovisual services” will not be included in the talks, which would allow EU countries to continue to subsidize their film industries. However, Mr De Gucht has reportedly said “the Commission may ‘come back’ to the issue later in the negotiations to ask for a new mandate in this area”. Perhaps Mr De Gucht has in mind a long-held desire by European air and shipping companies to gain a firmer footing in the US market – which apparently has always been as well protected by the US government from foreign interference (by the Jones Act), as the French government have protected their film industry.

(This issue over “audiovisual services” is interesting because although the CBP suggests that TTIP was conceived in 2011, many others might argue it first appeared twenty years ago in the shape of the Multilateral Agreement on Investment (MAI). According to George Monbiot in his excellent account of this story,1 the MAI pretty much founded on the rocks of French protection of their film industry.)

The “potential sticking points” are further described as “reducing non-tariff barriers to trade” (NTBs), with a view to

harmonising product regulation and standards (e.g., labelling, product specifications, sanitary requirements) in areas where these are deemed necessary, and eliminating them in areas where they are not. Other areas being contemplated include protection for foreign investors and a procedure to resolve investment disputes between the US and EU; co-operation to achieve greater participation by SMEs [small and medium enterprises] in EU-US trade; and provisions on intellectual property to protect the interests of US businesses in the EU and vice versa.

In other words the product regulation and standards which, for the most part, protects the interests of the 99% are to be “harmonised”, whilst foreign investors (financial institutions and transnational corporations) are to be “protected”.

Something of a “sticking point” – although not specifically mentioned as such – might be the attitude the US side appears to be bringing to the party. Reporting an interview the US ambassador to the EU apparently had with the Financial Times, the CBP claims the good ambassador said:

If a mandate is released that constrains negotiators – whatever you want to call it, a carve-out, a red line, an exception – if it’s not a clean mandate, it will increase the pressure on our side to do the same… That’s only natural. There is a quid pro quo here, and there will be a price to pay.

Much of the world is painfully aware of prices exacted by the American Empire, and these words of the good ambassador are obviously intended to be every bit as threatening as they appear. One also has to wonder if the good ambassador is including his own country when he talks about “exceptions” – given the words of his own president claiming “exceptional” status for the United States; or does he just take for granted US “exceptionalism” in all situations and is merely pointing out that no one else is entitled to it?

Food standards

There has long been widespread and significant opposition in Europe to GM foods, and the US has been pushing just as long and hard to force the unwanted GM products of its massive agricultural industry down unwilling European throats. On the one hand the European Commission has offered assurances that “that EU regulations on GM and hormones are not up for negotiation”; and on the other hand President Obama “noted that one of the major objectives for the US was the elimination of food standards ‘not based on science’”.

However, much of the opposition against GM products is not only about health implications and environmental destruction but also the monopoly control of US corporations over seed supply and other agricultural products – as seen with devastating effect in India, for example.

Public procurement

The CBP suggests that the EU is more desirous of EU companies being able to compete in the US against US companies than the other way around. This particular issue seems fraught with difficulties: apparently the US federal government doesn’t have the power to dictate to individual state governments; and in the EU there is real concern about plans to “protect foreign investors from government action”. Indeed, another Commons Briefing Paper specifically on the subject of ISDS mentions how its supporters try to make this idea attractive to all parties:

Proponents of ISDS often point out their mutual benefits for both state and investor in this respect, since as well as providing a guarantee for investors that claims will be adjudicated impartially, it enables countries to attract foreign investment that may otherwise be discouraged by poor governance.

In other words, making it easy for foreign corporations to bring risk-free law suits against governments that might try to protect the interests of their own people from exploitation by those corporations is somehow seen as a benefit to governments.

Financial Services

There’s a feeling that the US and EU are on different paths concerning the regulation of financial services. It’s claimed that some provisions in the US’ Dodd-Frank Act discriminate against non-US banks such as Barclays and Deutsche Banks. The EU want to see financial regulation included in the TTIP, but the US position is that it should remain part of other global forums such as the G20.

This is possibly the one area where the US is at something of a tactical disadvantage – given the phenomenal power of the European banking community. In other words, given the relatively higher standards of regulation in Europe in other sectors of trade, it’s Europe who would be the overall losers in the race to the bottom; but in the world of financial services the US is possibly slightly better regulated and would therefore be the losers in that particular race to the bottom. Hence, presumably, the desire of the US to exclude this sector from TTIP.

Investor-state dispute settlement (ISDS)

The part of the TTIP talks dealing with ISDS is arguably the most controversial issue of the talks. ISDS is a relatively new mechanism for dealing with trade disputes between the business world and governments, and is intended to enable businesses which have grievances against foreign governments to bring legal proceedings against them.

The CBP about TTIP (1) points out that the UK currently has over 90 ISDS arrangements in force, and that only two instances are known of actions brought against the UK government – neither of which, apparently, were due to government interventions. This point is used by the supporters of TTIP as a selling point, seemingly oblivious of the fact that if ISDS is so little used, why have it at all?

In a House of Commons debate on the TTIP on 25th February 2014 a few MPs expressed their concerns about any potential ISDS arrangement. The main cause of this concern is the fact that ISDS agreements are entirely one-way. They enable corporations to sue governments for any perceived wrongdoing, but governments are not able to sue corporations for failing to do what they are expected to do. This is a very considerable concern because it effectively renders it impossible for governments to control their own economies for the benefit of their own people. Public services could be entirely controlled by foreign corporations whose only concern is maximising profit, and governments would be effectively powerless to police the arrangement or re-nationalise the service. The Commons Briefing Paper that specifically relates to ISDS arrangements (4) identifies other serious issues, such as transparency, legitimacy, independence as well as the costs and time taken to pursue an ISDS action.

The Commons Debate

The recent debate about TTIP in the House of Commons was unremarkable and unsurprising. It revealed that TTIP enjoys cross-party support, and barring some major calamity – such as the general public getting to find out how their own trusted leaders are drooling over the prospect of stitching them up… again – the new agreement will be duly rubber-stamped just as soon as the plutocrats who run the British parliament desire.

However, one or two interesting points did come up during the proceedings.

The preposterous Ken Clark (he who has long advocated introducing a US-style prison system to the UK) was, almost naturally, representing the government and was of course wholly supportive of TTIP, but he did make one quite interesting remark, claiming that the TTIP would allow us to “deal with China”. He used that annoyingly patronising schoolmaster manner of his, as though China was a naughty child that needed to be taught a lesson. What was that about, I wondered. Why do these past masters at the Great Game see TTIP – which by definition has nothing to do with China – as some sort of tool to “deal with” that country?

The two best contributions to the debate, in my view, came from Zac Goldsmith, the Tory MP for Richmond Park, and the very excellent Jeremy Corbyn, Labour MP for Islington North.

Goldsmith pointed out that as many of the consumer protections and social standards in the EU are considerably higher than in the US any “harmonisation” of standards are not likely to result in social improvement or increased benefits for the EU consumer, adding that TTIP officials have consulted with 119 lobby groups representing the world of high finance and big business and a mere 8 groups representing human rights and the environment. Finally he observed that the talks appear to be going on in secret, and the exact details of what’s being discussed are something of a mystery.

Jeremy Corbyn, human rights supporter and anti-war campaigner with over 30 years of parliamentary experience, is one of the few MPs who’s always worth listening to. He was the penultimate speaker in the TTIP debate and made the most relevant points, in my view – the most relevant of which was his suggestion that lessons should be learnt from NAFTA. According to Corbyn many of the selling points that were used to promote The North American Free Trade Agreement over twenty years ago (about the same time as treacherous MAI talks were happening) are being used once again for TTIP; such as the illusion that NAFTA would be an equal partnership – but which actually resulted in one-sided benefits for huge US and Canadian corporations on the one hand and exploitation of the Mexican labour market on the other. Perhaps the most potent of Corbyn’s comparisons with NAFTA was the illusion of a jobs bonanza. TTIP is being strongly marketed by the main political parties as guaranteeing huge numbers of new jobs, but Corbyn reminded everyone that prior to NAFTA seven million new jobs had been promised, but what actually resulted was a loss of over a million jobs.

Conclusion

It almost goes without saying that the TTIP should be resisted, just as its predecessor the MAI was eventually resisted. The reasons given above are more than enough, but there’s another reason that I haven’t mentioned yet which is arguably even more relevant than all the others.

The heiress Leona Helmsley is infamous for a single remark she once made. She said “taxes are for little people.” What made Helmsley’s quote famous was the truth of it – not in the sense that it was officially true, of course, but that it was unquestionably true unofficially.

However, Helmsley’s words have a far deeper significance than mere institutionalised tax evasion by the super-rich; for she could have been even more truthful by saying that laws generally are for little people. And in the wider world too the truth lives on: international laws are for little countries. This is not only true for modern times. It’s always been like that.

Examples of the truth are truly legion. Indeed the whole of human history proves it, summed up best, perhaps, by Voltaire when he said: “It is forbidden to kill, therefore all murderers are punished – unless they kill in large numbers and to the sound of trumpets.”

Rich and powerful companies, like rich and powerful countries, routinely flout national and international laws whenever it suits them to do so. We have powerful banks, for example, which routinely ignore the few regulations that exist to try to control their excesses; oil companies that routinely ignore environmental laws; human rights are about on a par with animal rights; the United Nations and the International Court, supposedly the global law enforcers, are all but completely emasculated and relegated to the role of lackeys for the American Empire, necessary only to provide fig leaves of legitimacy for the actions of empire.

In other words TTIP should be resisted because it is no more than another net of phoney laws intended only to make life even harder for the small and the weak, laws which the super-rich and powerful will simply ignore as they have always done.

Our great trusted leaders tell us that protectionism is a great economic sin, and that it must be eliminated. But protectionism, coupled with military might, is exactly what every rich and powerful country has always practised, and continues to practice today, and will continue to practice tomorrow. What our great trusted leaders actually mean is, to borrow from Helmsley, protectionism is for big people; little people need not apply. Little countries that want to protect their people and economies from the attentions of the super-rich and powerful cannot be tolerated; ask North Korea, ask Cuba. TTIP is just another cynical device to provide a little more protection for the super-rich and powerful, and a lot less protection for the poor and weak. Obviously it must be opposed.